Senate approves lottery plan

INDIANAPOLIS – The Indiana Senate approved a plan Tuesday to outsource the state’s lottery and use the money to encourage life sciences research and provide college scholarships for students who stay in Indiana after graduation.\nThe bill, which cleared the Senate on a 27-20 vote, allows Gov. Mitch Daniels to lease the Hoosier Lottery for 30 years to a private company, which would run it and collect the profits. In exchange, the company would pay the state at least $1 billion upfront and give the state annual payments of $200 million.\nSupporters said leasing the lottery to a private entity could bring in money to help spur the economy and retain the state’s best students. But opponents said those laudable efforts should not be funded by the leasing of the lottery, which they said was often played by poor residents wasting money on a shot at a big jackpot.\n“The lottery’s a very regressive tax,” said Sen. David Ford, R-Hartford City. “We take more money from the lower income strata of society than the upper income.”\nThe upfront payment would be split among two or three initiatives.\nAbout $400 million would fund $5,000 annual college scholarships for high-achieving students. However, students would have to repay the money unless they lived and worked in Indiana for three years after graduation.\nAnother $600 million would go toward the Indiana Life Sciences Fund under the proposal. Public and private universities could apply for research grants under the fund, which supporters said would attract top researchers and faculty members to the state.\n“I want to tackle the problems we have with brain drain today and I want to widen our economy,” said bill sponsor Sen. James Merritt, R-Indianapolis. “I believe this is a quality plan to do so.”\nAny leftover money from the upfront payment would go toward a pension relief fund to help cities and towns deal with firefighter and police pensions.\n“This is a tremendous opportunity to move Indiana forward at very little risk,” said Sen. Luke Kenley, R-Noblesville. “Why not take that risk?”\nThe bill prohibits a private company from using keno or other video drawings to expand gambling. It also limits the amount of growth in profits the company can take in each year, and specifies that all advertising must be approved by state gaming officials.\nSome senators wondered why a private company would agree to pay the state more than $1 billion to run a lottery with so many strings attached.\n“If you were ever sold a pig in a poke, this was it,” said Sen. Lindel Hume, D-Princeton. “There’s got to be more to this. The other shoe is going to have to drop somewhere along the line.”\nThe bill next moves to the House for consideration. Democrats who control that chamber have criticized the proposal, and the draft of the state budget proposed by House Democrats blocks outright the leasing of the lottery.